Relief Granted Under Amended Section 16(5) of CGST Act: Madras
High Court
Brief Facts
of the Case:
The petitioner, M/s.
Rivera Enterprises, represented by its Proprietor Mr. Ganesha Murthy,
challenged the order dated 29.04.2024 passed by the Deputy State Tax
Officer, Keelambakkam Assessment Circle, seeking relief against recovery
proceedings initiated for ineligible Input Tax Credit (ITC) under Section
16(4) of the CGST Act, 2017.
The petitioner argued
that the recovery order was unsustainable in light of the amendment
introduced under Section 16(5) of the CGST Act, which allows extended time
for claiming ITC on invoices pertaining to FYs 2017–18 to 2020–21.
Case Title
and Details:
- Case Name:
M/s. Rivera Enterprises vs. The Deputy State Tax Officer & Another
- Writ Petition No.:
16289 of 2025 and W.M.P. No. 18417 of 2025
- Date of Order:
02.07.2025
- Court:
High Court of Judicature at Madras
- Judge:
Hon’ble Mr. Justice Krishnan Ramasamy
Submission
by the Petitioner:
- The petitioner referred to a batch
of earlier decisions passed by the same Court in W.P. No. 25081 of
2024 dated 17.10.2024, which upheld the right of taxpayers to
claim ITC till 30.11.2021 due to the retrospective amendment
of Section 16 through the Finance Act (No. 2) of 2024.
- Requested similar relief in the
present writ petition by invoking the principle of parity.
Submission
by the Respondent:
- The Government Advocate fairly
conceded that the issue raised in the current writ petition is already
covered by the earlier decision of the Court.
- Did not oppose the petitioner’s
request for similar treatment.
Court’s
View and Decision:
- The Court acknowledged the
petitioner’s eligibility to claim ITC under amended Section 16(5)
for FYs 2017–18 to 2020–21 if the GSTR-3B returns were filed on or before 30.11.2021.
- The judgment reaffirmed the binding
nature of the earlier decision in W.P. No. 25081 of 2024, which
quashed orders based on strict limitation under Section 16(4).
- Emphasized that amended provisions
prevail retrospectively, and benefit must be extended uniformly
to all eligible taxpayers.
Final
Judgment & Directions:
1. The
impugned order dated 29.04.2024 was quashed, to the extent it
related to disallowance of ITC merely on limitation under Section 16(4).
2. The
respondent Department is restrained from initiating any recovery based
on such disallowance.
3. Any
freezing of bank accounts must be reversed immediately, and
intimation sent to banks.
4. If
any recovery was made from cash/credit ledger, the same shall be:
o Refunded
to the petitioner, or
o Allowed
to be adjusted against future tax liability.
5. The
respondents are at liberty to pursue proceedings only on other
grounds (e.g., fake/excess ITC), if existing in the order, in accordance with
law.
6. The
writ petition was allowed, and the connected miscellaneous petition
was closed.
Conclusion:
This decision strengthens
the application of amended Section 16(5) of the CGST Act, offering
relief to businesses that missed the ITC deadline due to genuine hardships like
COVID-19 lockdowns or other disruptions. The Madras High Court ensured
uniformity of relief and upheld the principle that retrospective
beneficial amendments must be fairly applied.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
Press On Click Here To Download Order File
Click here
